Oil markets between the push and pull (Tug of War)

Oil markets between the push and pull (Tug of War)

- in Releases
1067
Comments Off on Oil markets between the push and pull (Tug of War)

أوبيك-السعودية-إيران

 

The oil markets are  in tug war now. It seems that oil prices still have a lot of surprises, and data , in which markets are  experiencing changes in attitudes and  productive policies  amid of   Saudi Arabia and Russian efforts to intervene to restore balance to the oil markets.

Recently oil prices  are fallen as overwhelmed by the abundance of oil on the market and hopes faded  to fix  production in most of the observers.

The data of  American Petroleum Institute  has revealed a sudden increase in crude inventories in the United States last week, despite a drop in gasoline stocks that were declined  sharply and the decline in distillate stocks.

During the last period  , producing countries were unable to come to a decision to  fix the production ceiling, and we noticed how the efforts of the producing countries were frequently failed starting from Doha meeting  in the last April, but these countries are still trying to find a convergence formula of views between producers .

In a new development in this context, Iraq announced  that it does not welcome to the decision  to fix  the  production ceiling  scheduled to be addressed at the informal meeting, which  Organization of Petroleum Exporting Countries  (OPEC) intends to hold it   in Algeria in late next September  and Russia will also attend it.

Iraq is seeking to increase its production, which currently stands at about 4.6 million barrels per day, noting that  Iraq  is due to put the budget of  2017 on the basis of $ 35 a barrel, and Iraqi Prime Minister Haider al-Abadi said Iraq does not welcome a limitation of  ceiling for oil production because it has  not  recovered yet  its  complete  share  in the market.

It is indicated  that Iraq sells  crude with a price less than the  world oil prices , which ranged from $ 50 a barrel.

As for Iran, which has always been a stand in front of any agreement on production since the end of international sanctions against it, but it has recently hinted to the possibility of cooperation with other producers around the world production to revive prices, according to Reuters news agency.

Tehran sees that its right to compensation for  what was missing  by years of isolation, while OPEC countries and other nations  from outside the  organization , productive  of oil seek to make attempts to stop the deterioration of oil prices by some measures, including freezing the production ceiling at a certain level, but Iran refuses to do so, and Tehran has refused to participate in previous meetings of  fixing the  production levels, which collapsed, as it has said it wants first to increase its production to the  levels before the  Western sanctions  to  a four million barrels per day.

According to the International Energy Agency, Iran lifted oil production to 3.56 million barrels per day in April, a production level  in November 2011 before narrowing sanctions on it .

Strenuous attempts by the producing countries of OPEC and outside of it  to re-adjust oil prices, which in a state of tug of war since the collapse of prices in the summer of 2014, it has lost  from  its  price more than 60% of  its value, and now the price of a barrel of oil is exhausting the  burden  of rentier economies that adopt budgets on the price of  raw .

Despite the divergent positions of the member states of OPEC and producers in general  , the pessimism remains among many observers, especially with the absence of  hopes to reach an agreement on the ceiling on the sidelines of the International Energy Forum in Algeria, and perhaps this case apply to the OPEC meeting in Vienna, and here the failure of  agreement  to determine the production ceiling may lead  for a return to the quota conflict and raise the levels of production of some producers.

Amer Al-Omran

Translated by : Mudhaffar Alkusairi

 

Rawabet Center for  Research and Strategic Studies